GBP/USD confronts near-term key resistance amid Brexit optimism

• GBP/USD cheers increasing odds of Tory leadership.
• US-China trade hopes, military tension and Russian meddling in British politics keep the gains in check.
• UK PM’s speech, US Housing numbers and trade/Brexit headlines will be in focus.

Rising expectations of a Tory leadership after the December election propels the GBP/USD pair to confront a month old falling trend line resistance while taking rounds to 1.2925 ahead of London open on Monday. Even so, catalysts challenging the broad risk-tone, as well as hardships for the UK PM, limit the pair’s further upside.

Survation polling joined the league of leading surveyors plotting nearly 40% odds of another Conservative victory in the United Kingdom’s (UK) election. The first of its polls show around 14 points of a margin between the Tories and the opposition Labour party.

Even so, doubts related to the Russian meddling in British politics, due to the Conservatives’ refrain from releasing the report before election, keep the cable’s gains under check. Also, geopolitical tension between the United States (US) and China, concerning Hong Kong and Taiwan, raises questions over the recent optimism surrounding the US-China trade deal.

With this, the market’s trade sentiment remains sluggish with the US 10-year treasury yields taking rounds to 1.82% while most Asian shares flashing mixed signals.

Investors will now concentrate on the British Prime Minister (PM) Boris Johnson’s speech at Confederation of British Industry’s (CBI) annual conference for fresh political impulse. On the economic calendar, the US NAHB Housing Market Index numbers for November, expected to remain at 71, will occupy the thin line of statistics. However, trade/politics headlines will keep the driver’s seat.

Technical Analysis

Unless providing a daily closing beyond the four-week-old descending resistance line, at 1.2930, prices are less likely to aim for 1.3000, which in turn highlights the weeklong rising trend line at 1.2850 as immediate support to watch.